The Implied Warranty of Habitability is Extended by PA Superior Court

March 2013Articles In the Zone

On November 5, 2012, the Pennsylvania Superior Court reversed and remanded back to the Bucks County Court of Common Pleas a case of first impression addressing the reach of Pennsylvania’s implied warranty of habitability for residential home construction.

At issue in Conway v. The Cutler Group, Inc. (2012 PA Super 242) was the question of whether the implied warranty of habitability extends beyond the initial user-purchaser of a home to a second or subsequent purchaser. The appellate court held that it does.

The Conways purchased a home from another owner and subsequently experienced water infiltration into their bedroom years later. Upon professional inspection, it was determined that the infiltration was the result of various construction defects. The Conways filed suit against the builder for breach of the home’s implied warranty of habitability.

The implied warranty of habitability, first recognized by the Pennsylvania Supreme Court in 1972 (Elderkin v. Gaster, 288 A.2d 711 (Pa. 1972)), is meant to protect the consumer by balancing the relationship between the experienced builder and the average home purchaser. It warrants that the home is constructed in a “reasonably workmanlike manner and that it is fit for the purpose intended-habitation.” Indeed, it removes certain latent construction defects from the doctrine of caveat emptor and shifts the risk of those defects to the builder. (See Elderkin, 776-777).

In Conway, the builder argued that the implied warrant only extends to the initial purchaser and not subsequent owners of the home. Furthermore, he contended that the alleged defects did not render the home unfit to live in.

The various Courts of Common Pleas across Pennsylvania have been divided on the question of whether subsequent purchasers can pursue claims against builders for breach of implied warranty of habitability. However, Courts of Common Pleas decisions are not binding on the Superior Court.

The Superior Court found that the implied warranty is not a contractually dependent remedy, but rather it exists independently even absent a contract between the builder and current homeowner, who may not be the initial user-purchaser.

The court points out that it is not only the new home purchaser who relies on the skill of the builder to construct a suitable living unit. Second and subsequent purchasers also implicitly trust that the home is habitable and free from latent construction defects. Indeed, regardless of how many times the title changes hands, the court found that the same assurance exists that the home is free from hidden structural defects.

Furthermore, the court opined that it would be inequitable to re-shift the risk of a potential latent defect from the builder back onto the second or subsequent homeowners – particularly when hidden defects may not manifest themselves until years later.

It is important to point out, however, that the Conway decision does not advocate unlimited liability against the homebuilder. The plaintiff still has the burden to show that the alleged defect is latent, attributable to the builder’s design or construction and affects habitability. Moreover, all homeowners must commence their claims within 12 years after the completion of construction before the statute of repose expires.